Department for Education: Capital funding for new school places - Public Accounts Committee Contents


Conclusions and recommendations


1.  The Department does not know whether it is achieving value for money with the funding it provides to deliver new school places. The Department believes that local authorities will be able to deliver the 256,000 places required by September 2014 with the £5 billion of public money it is now providing. However, it does not yet understand how authorities are delivering these places, the costs to local authorities, the legitimate variation of costs between authorities or the relative value for money of authorities' different approaches. The Department intends to collect new information from authorities on where places are being delivered and the costs of delivery in June 2013, but has not yet determined how this information will be used. The Department must set out how it plans to use its new information on school places to ensure that capital funding is given to those local authorities that have the greatest need for extra school places. The department must also clarify how it will support and challenge local authorities and show that value for money is being achieved.

2.  The Department was slow to respond to the rising demand for school places. The Department relied on national demographic statistics and local authorities' projections of need. We accept that forecasting involves inherent uncertainties, but both national and local projections were slow to identify the trend of rising demand. Despite the birth rate beginning to increase in 2001, it was not until 2008 that the ONS reflected the rising birth rate in its population projections.[2] In addition, the Department has taken too long to develop its funding approach to better target available funding to the areas that need it most. Delays in recognising and then responding to the scale of the challenge have limited the Department's and authorities' ability to effectively prepare for future levels of demand when making decisions about the size and shape of the school estate. To avoid being caught out in future, the Department should, working with the Office for National Statistics (ONS), the Department of Health and local authorities, model different scenarios in order to manage emerging demand better in both primary and secondary schools.

3.  The Department has improved the way it targets money to areas of need but there are still gaps in its understanding of the full costs of delivering new places. The Department's latest funding allocations (announced in March 2013) have given relatively more funding to areas projecting the greatest pressure on places. However, its funding mechanism does not sufficiently take into account the availability and cost of suitable sites in different areas. In addition, the Department has not yet factored in the expected reduction in costs from the more modern designs developed as part of the Priority Schools Building Programme. In ensuring that its funding allocations are as sensitive to need as possible, the Department must understand and reflect all appropriate costs incurred by local authorities in providing new school places.

4.  The Department's assumption about local authorities' contribution to the cost of delivering school places was made without robust evidence and without proper regard being given to the reduction in local authority spending. Local authorities have been using funding from other programmes to meet demand for school places, despite the Department's view that its funding is now sufficient to cover the costs of delivery. The Department's assumed contribution was a broad, national estimate and did not take account of local factors that might lead to individual authorities contributing more or less than the national estimate. In 2012-13, 64% of authorities were drawing on maintenance funding to pay for extra school places, storing up unknown maintenance costs for the future. In addition, the Department has not considered wider pressures on local authorities resulting from reduced budgets in its assumptions. The Department should develop more realistic assumptions about the level of financial contribution authorities can be expected to make to delivering school places, which take account of the wider financial challenges authorities face.

5.  In order to fulfil their statutory obligations and in the new context where local authorities do not control Academies and Free Schools, local authorities need to have mature discussions with all parties, including these schools. Local authorities can direct maintained schools to expand or close, depending on fluctuations in demand, but do not have this power over academies or free schools. Local authorities cannot create new schools that are not academies or free schools although authorities may encourage bids for creating free schools in their areas. We asked the Department how it would resolve matters if, for example, it would be better for an academy or free school to expand or to close in accordance with changing demand in an area, but the particular school(s) did not wish to do so. The Department told us that such situations are best settled by sensible discussions between professionals in the area concerned, and assured us that matters had been resolved in this way in all cases so far. We hope that discussions at local level always prove successful; however, we would like to receive greater reassurance about the actions it will take in order to help resolve matters to achieve the best value for money solutions in the event that local discussions break down.

6.  There is little oversight of the impact decisions about how to provide new places may have on pupils' learning. In the rush to deliver sufficient places, authorities may have to make decisions that affect the quality of education on offer. For example, in areas where there is pressure on school places and a shortage of suitable land, authorities may have to convert communal spaces and specialist areas (such as libraries or music rooms) into classrooms. Some authorities may have no choice but to expand poorly performing schools, if places are required in that area. In its response to us, the Department should set out how it intends to monitor the impact that current pressures to increase the number of school places are having on educational opportunities, quality and standards.


2   Qq 26, 58, 92-94, C&AG's report, figure 3 Back


 
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Prepared 28 June 2013